(MENAFN- Trend News Agency)
BAKU, Azerbaijan, November 26. COP29 has
provided an opportunity for MDBs, including the Asian
Infrastructure investment bank (AIIB), to engage with a wide range
of stakeholders regarding the work we're doing in the climate
space, said Seleha Lockwood, Senior Climate Strategy and Policy
Specialist at AIIB in an exclusive interview with Trend .
"This COP, as well as previous COPs, provides an opportunity for
MDBs, including the AIIB, to engage with a wide range of
stakeholders regarding the work we're doing in the climate space.
It is also an opportunity for exchanging knowledge and for
collaboration," she said.
Lockwood highlighted the release of a joint MDB statement at
COP29, which outlined their accomplishments over the past year and
outlined plans for the future. "This serves as a means of sharing
information and demonstrating our openness to collaboration".
In 2023, MDBs achieved a milestone in climate finance,
collectively mobilizing $125 billion. At COP29, they pledged to
raise their annual climate finance contributions to $170 billion by
2030, including $120 billion for low- and middle-income countries
and $50 billion for high-income nations.
"For MDBs, strengthening collaboration efforts at the country
level is important as we help nations in formulating and
operationalizing long-term climate strategies," Lockwood noted,
emphasizing the value of targeted support in achieving sustainable
development goals.
Lockwood also pointed to the importance of showcasing innovation
and advancing new frameworks. "For this COP, MDBs presented a paper
outlining our vision for supporting country-led platforms," she
said. "We also worked throughout the year with other MDBs on a
second paper, which introduces a common approach to results. This
aims to go beyond merely reporting climate finance - a practice we
will continue - to focus on outcomes and impact".
AIIB's core priorities in Central
Asia
"The AIIB is focused on our mandate of 'infrastructure for
tomorrow,' which includes green infrastructure as one of its key
priorities. Other major aspects of our work are regional
connectivity and private capital mobilization," said Lockwood.
"While we have members in the Asia-Pacific and Central Asia
regions, we also have a global membership, consisting of 110
countries".
She emphasized AIIB's role in supporting regional and national
efforts on climate, particularly in Central Asia. "In the context
of the Asia-Pacific and Central Asia, as with other regions, we
would like to support country efforts on climate and regional
initiatives at COPs," Lockwood stated.
At COP29, the AIIB demonstrated its support for the regional
Special Programme for the Economies of Central Asia (SPECA), an
initiative aligned with its mandate. "As part of this initiative,
and in line with our mandate, we prioritize support for both the
public and private sectors".
The AIIB also led several discussions on key climate topics,
including adaptation, the health-climate-nature nexus,
biodiversity, and carbon markets. "At these events, AIIB showcased
action on climate and plans ahead," said Lockwood. She highlighted
the bank's achievement in climate finance, which reached 60 percent
of its annual investments in 2023, surpassing its 50 percent
target. "Although we have exceeded our target, we remain committed
to scaling our financing for adaptation and mitigation to support
country plans".
Expanding its scope beyond project financing, AIIB introduced a
new climate policy-based financing tool at COP29. "Our work now
goes beyond project investments as well. We are expanding into
climate policy-based financing to create an enabling environment
and incentivize climate action and support governments in these
efforts," she explained. "We shared this new instrument at COP29
with our clients across all our events that we organized and
participated in".
AIIB's major solar investment in
Azerbaijan
Further, Seleha Lockwood spoke about AIIB's recent major solar
investment in Azerbaijan, which marked a significant step in the
bank's climate action strategy. "We released a Climate Action plan
last year, which emphasizes working closely with our clients and
building meaningful partnerships. This particular investment in
Azerbaijan exemplifies that approach, as we are collaborating with
other MDBs and the country itself to support their energy
priorities," she said.
The investment, totaling $160 million, will fund the development
of two solar PV power plants: the 315 MWAC Neftchala Solar PV Power
Plant and the 445 MWAC Bilasuvar Solar PV Power Plant. The project
is being developed in partnership with Abu Dhabi Future Energy
Company PJSC (Masdar), and will significantly contribute to
Azerbaijan's renewable energy capacity.
"This project is a transformative investment that will
significantly change the energy mix in Azerbaijan," Lockwood noted.
"We are excited to be part of this initiative, which holds
substantial strategic importance for the country's future energy
landscape".
The project is co-financed by the Asian Development Bank (ADB)
and the European Bank for Reconstruction and Development (EBRD),
with SOCAR Green joining Masdar as a local partner. Lockwood
emphasized that this collaboration reflects AIIB's commitment to
fostering regional cooperation and supporting countries in their
climate goals. "The partnership with multiple MDBs and local
players underscores the importance of collaboration in tackling
global challenges like climate change," she said.
The solar investment is aligned with AIIB's broader strategy to
prioritize green infrastructure, in line with its commitment to the
Paris Agreement. "Our strategy prioritizes green infrastructure and
aligns with the goals of the Paris Agreement," Lockwood stated.
"Since July 1, 2023, all of our project investments have been
aligned with Paris goals, and this investment is no exception".
AIIB's commitment to the project is already evident, as its
investment operations team has been actively engaged on the ground
in Azerbaijan since the first week of the initiative. "We are
already on the ground, engaging with counterparts in Azerbaijan,
ensuring that the project progresses smoothly," Lockwood added.
AIIB spotlights infrastructure finance innovation at
COP29
Further, Seleha Lockwood spoke aboutthe side event "Breathing
Life into Infrastructure Finance", hosted by AIIB on the sidelines
of COP29.
"This event was organized with a partner, Our Common Air, as an
official UNFCCC side event. The UNFCCC encourages such
collaborations. The event, titled Breathing Life into
Infrastructure Finance: Integrating Health, Air Quality, Climate,
and Nature, was designed alongside other partners and aligned with
our economics department's focus this year.
In this event we built on the findings of the economics
department at AIIB on the interlinkages between health, nature and
climate in infrastructure investment. We are also building on the
concept of nature as infrastructure that AIIB focused on in our
2023 Asian Infrastructure Finance report. For example, instead of
financing traditional grey infrastructure for flood control,
nature-based solutions, such as mangroves, might offer better
alternatives. This event highlighted the critical importance of the
health perspective to action on nature and climate in
infrastructure investment," she said.
The main takeaways emphasized the importance of considering
health impacts when planning infrastructure investments and
exploring opportunities within the healthcare sector to contribute
to mitigation and resilience. The approach extends beyond
healthcare systems to consider health holistically, considering
nature solutions as well.
Our Common Air, focused on air quality and air pollution and
that clean air needs to be considered an asset class, Lockwood
added. "At AIIB, our analysis addresses air quality's relevance,
but we go beyond that to examine water quality and other
environmental aspects".
"The criticality of cross-sectoral and cross-government action
on integrated climate, health and nature action was also discussed
with the example of the Brazil Climate and Ecological
Transformation Investment Platform. Addressing gender inequalities
in the health, air quality, climate and nature space were
emphasized. Note here that AIIB released its first Gender Action
Plan this year. New financing products and approaches for financing
the health, climate and nature nexus were raised such as debt for
nature swaps.
The follow-up event, held at the Joint MDB Pavilion, centered on
Infrastructure for Planetary Health. It built upon the initial
event and delved into the interconnections between health, climate,
and nature, in infrastructure investment. The first session on
November 14 had a high-level strategic focus, while the Joint MDB
Pavilion event provided a more technical discussion with specific
examples of integrating climate, health, and nature," she
added.
AIIB drives climate action with innovative
financing
"At AIIB, we utilize various financing instruments to address
gaps in funding for integrated activities related to climate,
nature, and health," Lockwood stated. Highlighting a growing
interest in innovative solutions, she noted, "As mentioned in the
joint MDB nature and biodiversity session I recently participated
in on November 21 within COP29, there is a growing interest in
instruments like debt-for-nature swaps. AIIB is exploring such
innovative financing approaches to address gaps and client
needs".
One of the bank's key strategies is co-financing and blended
finance. This involves collaboration with philanthropic
organizations and funds, alongside other financial entities, to
reduce capital costs and amplify impact. "Many of our events
include philanthropic organizations and funds offering grants or
other instruments, which we blend with our financing to maximize
impact," Lockwood explained.
AIIB is also leveraging capital markets to drive private sector
participation. Lockwood cited the issuance of a 500 million
Australian dollar adaptation bond as a prime example. "The projects
underpinning this bond are aligned with climate finance tracking
taxonomies for adaptation," she emphasized, noting the successful
attraction of private sector interest.
The bank's commitment extends to fostering regional
partnerships. "We invest through local banks, as we have done, for
instance, with TSKB in Türkiye," Lockwood noted. In 2022, AIIB
signed a $200 million loan agreement with TSKB for climate change
mitigation and adaptation projects, following a similar $200
million Sustainable Energy and Infrastructure loan in 2018.
"Through this fund, and in line with the Paris Climate Agreement,
TSKB will finance Türkiye's investments in renewable energy, energy
efficiency, and supporting industries," she added.
Another cornerstone of AIIB's approach is its climate
policy-based financing instrument, which facilitates direct
collaboration with governments. "This involves identifying regional
infrastructure financing gaps and determining appropriate tools -
such as market incentives, carbon markets, or other mechanisms for
climate action," Lockwood said. She emphasized that this strategy
supports tailored solutions through upstream discussions with
governments, ensuring that investments align with green
infrastructure commitments.
"Our focus here is to work with public and private sector
clients to identify the best options for financing infrastructure.
This includes discussing holistic and multisectoral approaches to
maximize adaptation, mitigation, and nature solutions, in projects
and in climate policy-based financing, including country-led
investment platforms," she said.
A core element of AIIB's strategy involves innovation in
financial instruments. "We are committed to exploring innovative
financial approaches, diversifying our financing offer," she said.
Highlighting climate policy-based financing as a crucial new tool,
Lockwood added, "We aim to partner with others to explore
instruments such as debt-for-nature swaps, build on the success of
our adaptation bond, and use capital markets more creatively to
channel financing into this critical area".
Global collaboration remains at the heart of AIIB's operations.
"Partnering with other strategic entities, such as other MDBs -
whether those experienced in debt-for-nature swaps or those engaged
with countries on climate plans - is a core principle of AIIB's
international operations," Lockwood noted. Despite its regional
focus, AIIB's global membership enables it to extend its efforts
worldwide. "For example, we've had meaningful engagements in
Brazil, reflecting how our international reach aligns with our
objectives," she explained.
Lockwood further underscored AIIB's commitment to shaping the
climate agenda through cooperative efforts. "Our priorities and
collaborations established at this COP are well-aligned with our
Asian and global mandate and will continue to shape our efforts as
we move forward from this COP to the next," she concluded.
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